Section 301 duties from China – Three lists and an escape hatch

Section 301 duties from China – Three lists and an escape hatch

Following the determination that China has been acting unfairly in their trade dealings with the United States, the US Trade Representative took action and published a list of more than 1300 HTS numbers that would be subject to an additional 25% duty. After public hearings and a comment period, that list came into force on July 6, 2018. That list can be downloaded here.

Since then there have been two additional lists published, neither of which are official yet but remain in the public comment period. The second list of more than three hundred HTS numbers would carry the same 25% duty. The final list, announced on July 10th, covers an additional $200 billion but the duty rate is only 10%. However, this list contains many items that consumers would see at a retail level including luggage, handbags and bicycles. Download the 10% list here.

These additional duties imposed by the US are part of an escalating series of exchanges between the US and Chinese government where American exporters, particularly those of agricultural products, are facing reciprocal duties entering China. There is this story of a charter vessel of soybeans unsuccessfully reaching China for entry prior to the imposition of their duties.

Importers and interested parties do have a vehicle to attempt to secure an exclusion for their products, the full details of which are on the USTR’s website. If successful, the exclusion would be retroactive to July 6th (for the first list of 818 products) and be good for one year from the date of approval. Unlike scope rulings or binding rulings which are narrow and limited to the parties who received them, any exemption granted to an HTS number can be used by any importer, not just the company or individual who secured the exemption.

At Coppersmith, we are working closely with our clients who have goods on any of these three lists and who are interested in writing to request an exemption. For more information on the lists or the potential for exemptions, contact me (Bob Glover) in Los Angeles at (310) 607-8000.